Courts issue conflicting decisions in public-entity cases against gun industry.

Two cases brought by public entities in New Jersey against the gun industry recently yielded conflicting opinions on the viability of public-nuisance claims that seek reimbursement of government expenses--including costs for police protection, emergency and medical services, and pension benefits--associated with gun-related crimes. The decisions reflect a split in opinions issued by state and federal trial and appellate courts that have attempted to apply settled tort law to a novel liability theory.

The first lawsuit of this kind was filed by the city of New Orleans in 1998. Since then, one state--New York--and more than 30 municipalities have filed similar claims. (See Allen Rostron, Gunning for Justice, TRIAL, Nov. 2001, at 26.)

The complaints echo those brought by state governments to recoup from the tobacco industry costs associated with smoking. Although plaintiffs have invoked a variety of legal theories--including products liability, negligence, and unjust enrichment--some experts say the public-nuisance claims hold the most promise for plaintiffs; but as the recent New Jersey cases indicate, they are receiving mixed reviews in the courts.

In a decision hailed as a victory for the gun industry, the Third Circuit ruled that Camden County's public-nuisance claim against several gun manufacturers had been properly dismissed by a lower court. (Camden County Bd. of Chosen Freeholders v. Beretta, U.S.A. Corp., 273 F.3d 536 (3d Cir. 2001).)

The suit had alleged negligence and negligent entrustment in addition to the nuisance claim, and the trial court dismissed all three. The negligence claims failed for lack of proximate cause, the court held, and the nuisance claim was defective because the county board had not alleged that the gun industry "exercised control over the nuisance to be abated."

On appeal, the board pursued only the public-nuisance claim, which the Third Circuit shot down in a brief, unanimous opinion. Historically, the court noted, public-nuisance law has applied only to claims alleging interference with land or public rights. New Jersey courts had followed this trend by honoring the boundary between products liability law and public-nuisance law, the court said.

"No New Jersey court has ever allowed a public-nuisance claim to proceed against manufacturers for lawful products that are lawfully placed in the stream of commerce.... If defective products are not a public nuisance as a matter of law, then the nondefective, lawful products at issue in this case cannot be a nuisance without straining the law to absurdity," the court said.

Even if public-nuisance law could be "stretched far enough" to encompass the plaintiff's allegations, the court said, the lower court was correct in ruling that the claim lacked the requisite showing of proximate cause.

"No direct link is alleged between any manufacturer and any specific criminal act," the court said, agreeing with the defendants' assertion that they were many steps removed from the harm alleged: (1) the manufacturers produce the firearms; (2) they sell them to federally licensed distributors; (3) the distributors sell them to federally licensed dealers; (4) some of the firearms are diverted by third parties into an illegal gun market; (5) these firearms are obtained by people who are not licensed to have them; (6) the firearms are then used in criminal acts that wound or kill Camden County residents; and (7) the county must spend resources combating or responding to those crimes.

The court rejected the board's argument that alleging a defendant engaged in conduct that merely contributes to the interference with a property or public right is sufficient to state a public-nuisance claim. "Even if the requisite element is not always termed `control,' the New Jersey courts in fact require a degree of control by the defendant over the source of the interference that is absent here," the appellate court said.

In the second case, a trial court in Essex County refused to dismiss public-nuisance and negligence claims brought by the city of Newark against gun manufacturers, distributors, and industry groups for expenses and investment losses associated with gun violence. (James v. Arcadia Machine & Tool, No. ESX-L-6059-99 (N.J., Essex County Super. Ct. Dec. 11, 2001).)

The James court criticized the trial court's decision in Camden County, which it found had rejected the plaintiff's claims in that case simply because they were novel.

"If all claims were rejected because they were novel, the law would be where it was in the reign of King John. The law is not so rigid," the court wrote.

Then, taking aim at the Third Circuit's reasoning in Camden County that limited application of public-nuisance law to land and public rights, the James court said, "We are concerned about the accuracy of the definition of real property and violations of public law. In our view, New Jersey law does not require that plaintiffs prove both injury to real property and violation of public rights" to bring a nuisance claim.

Whether the elements needed for such a claim can be established is a factual question that should be left to a decision-maker at trial, the court concluded.

The James court also took issue with the Third Circuit's assumption that the gun manufacturers' conduct in that case was too remote from the alleged harm to sustain a claim: "The question whether defendants have sufficient `control' as to warrant finding against them is essentially factual," and, again, should be decided by a judge or jury.

And while the federal court found that no state court had allowed a nuisance claim based on similar allegations to go forward, the James trial court concluded that "there are no cases which hold that a plaintiffs nuisance action such as this may not be brought. Clearly the action fits within the general principles of nuisance actions, ... and applying the rule against dismissal of causes of action at their inception, the defendant's motion as to the nuisance claim must be denied."

David Kairys, a Philadelphia lawyer and law professor at Temple University who argued on behalf of Camden County before the Third Circuit, said the plaintiff has filed a petition for reconsideration en banc and a request for certification to the New Jersey Supreme Court.

"These petitions for reconsideration are rarely granted, so I'm not very optimistic," Kairys said. "But I do think we have a really strong case. I think [the petition] should be granted because this is a case where the federal court is trying to say what New Jersey law is."

The James court decision was forwarded to the Third Circuit the day after it was issued, Kairys said, as further proof that a New Jersey court would have allowed the plaintiff's claim to proceed.

"Federal courts in diversity actions are not supposed to create new principles. They're supposed to take the principles already on the books in the state. Instead of doing that, the court created a new causation standard for public nuisance," Kairys said.

Allen Rostron, a staff attorney for the Legal Action Project at the Brady Center to Prevent Gun Violence, agrees.

"The federal courts are supposed to be predicting what the state courts would rule," he said.

Rostron also agreed that the chance of success was slim for the Camden County plaintiff, noting that even if the petition for reconsideration were granted, the reviewing court would be under no obligation to follow a trial court's decision, which does not have the authority of an appellate court ruling.

Despite the setback in Camden County, Kairys said that of all the allegations that have been made in public-entity cases against the gun industry, he still believes that the public-nuisance claim is the strongest.

"It avoids the problems of causation and standing that have up until now resulted in the gun industry winning every claim brought against them," he said.

Of the courts that have considered the public-nuisance claim, eight have rejected it and three (including the James court) have upheld it.

What happens next is hard for anyone to predict. The New Jersey Supreme Court may accept Camden County's request for certification. Or the defendants in James may decide to file an interlocutory appeal. Or the case may go to trial and then be appealed.

Eventually, though, the question of whether a public-nuisance action against the gun industry is viable in New Jersey will be decided by a New Jersey appellate court, Rostron said.

"Ultimately, it's up to state courts to decide what state law is."